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Broadband in India: Pipes

India made one fundamental mistake when it came to awarding wireless licences a long time ago. It gave them to BSNL and MTNL (the two dominant public sector wireline players) instead of doing what China did. China created two new companies for the mobile business. The result was that during the early days in India, the profits from wireline got diverted to building the infrastructure for the wireless instead of being reinvested to upgrade the wireline infrastructure. Now, of course, no one really cares about the wireline business since all the money and growth is in wireless. This decision, with a conscious government strategy to almost strangulate the private ISPSs, ensured that there would no broadband boom in India.

The past is over and done with. What can be done now? We do have now the private wireless telcos showing an interest in spreading broadband across the country. But that is happening too slowly since the last-mile connectivity into homes is still a challenge. It is in this context that the two things I suggested earlier in the week need to happen – and both unfortunately require government intervention.

Firstly, the last-mile wireline connectivity access (local loop, as it is called) needs to be opened up to all the private telecom players and ISPs. This will reduce costs of delivering broadband to homes that already have last mile access but without relying only on BSNL and MTNL.

Secondly, the 3G and BWA auctions need to happen on time and transparently. This will start the process of using wireless options (3G, WiMax) to provide connectivity into homes. For this, the public good has to be put above government greed – which is easier said than done, given past experience!

What we need in India is 1 Mbps to homes for Rs 250 on wireline and Rs 500 on wireless – with no data transfer limits. That will then drive the growth of Services.

Hmm. All these days I assumed fixed line connections, and importantly television cable lines are all what we need to serve the last mile, both of which would have sufficient capacity to carry up to 100 Mbps. Unless, there is a real need to lay down optical cables to support to the other of Gbps for next generation.

How would one ensure last line connection to every home in ever-expanding towns? Would it possible to deliver all services telephone, TV, internet on the same line? The segment is so fragmented that we better live with what we have. I’m more interested if somebody put money in laying cables across the seas to increase overall channel capacity to several Petabytes.